Millions of Americans are under the “Stay-at-home” order, but they’re also probably wondering right now whether they will be able to keep the home in which they are forced to stay once the pandemic is over.
Nearly 10 million Americans filed for unemployment insurance in March, with estimates that up to one-third of the U.S. workers may be unemployed by the coronavirus crisis.
Even those who still have jobs are prioritizing expenses, and housing payments seem to be at the bottom of that list.
According to new data by the National Multifamily Housing Council, nearly one-third of a total of 43 million Americans who rent failed to pay their rent in April.
Renters across the country have organized rent strikes in recent days, calling on elected officials to provide immediate financial relief to tenants and threatening to withhold payments to landlords.
As the first of the month loomed, the term “rent strike” began trending, with activists urging renters facing hardship to prioritize basic needs. According to information at Rent Strike 2020, at least 1.5 million renters have signed on to withhold rent.
The problem with this strategy is that the vast majority of providers of rental housing are small businesses that rely on rent payments. If rent money stops flowing, nearly 18 million workers employed by property management companies could lose their jobs, leading to an even bigger rent crisis.
Borrowers aren’t being forgiven. Instead, the measures call for forbearance – the postponement or reduction of the loan payment due. Some states have partnered with lenders to offer similar programs on mortgages, waiving up to 90 days of payments.
According to the Mortgage Bankers Association, requests to delay mortgage payments have skyrocketed in the last few weeks. At the end of March, there were more than 200,000 requests while in the first week of this month, that number jumped to more than 700,000.
As for real estate at large, it was holding strong in the first three months but with late March, the number of newly-listed properties fell by 13.1% and 34%, respectively, when compared with the same period a year ago, according to Realtor.
The only silver lining for home buyers is this: The COVID-19 pandemic has brought travel to a standstill, which means it’s also bringing vacation rental platforms to a standstill.
Vacation rental platforms such as Airbnb, VRBO, and HomeAway have seen the majority of their bookings canceled. The trend is already being referred to as the “AirBnB Apocalypse,” as the vacation booking giant bleeds money. And that may get worse as several cities in the U.S. and Canada have even banned short-term rentals.
While this leaves some homeowners without planned income, which for many serves as a mortgage payment they couldn’t otherwise afford, for others, it’s a boon of cheap rentals.
However, owners of vacation rentals are scrambling to find long-term tenants for their properties, flooding rental websites with cut-price, furnished properties.
By Josh Owens for Safehaven.com
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